As Trump bans DEI programmes, here why an inclusive workplace is good for business

There is no strict legal definition of DEI, but Damien McCarthy, managing director of the HR Buddy consultancy firm, outlines how it is understood in practice.

“Diversity refers to the representation of people from a variety of backgrounds at all levels in an organisation, a diversity of races, genders, disabilities, religions, ages, and sexual orientations,” he says.

“Equity focuses on fairness and impartiality, especially in relation to whether people are fairly paid, treated and considered for opportunities for progression. Inclusion is about whether people feel like they belong and are heard and valued in their organisation.”

Síobhra Rush, a partner at the employment law specialists Lewis Silkin, says Irish law protects us from discrimination.

“It sets the basic rules to protect people from unfavourable treatment based on things like age, disability, race, religion, gender, and sexual orientation, but DEI policies go further,” she says. “They actively promote a culture of inclusion and belonging at work.”

Caroline Murphy is an associate professor of employment relations at the University of Limerick. She elaborates further on Rush’s point: “Rather than focusing solely on preventing discrimination, DEI focuses on behavioural and cultural change, addressing individual and organisational approaches to integrating different backgrounds, viewpoints and characteristics.”

No compromise on standards

Rush provides examples of how some companies have done this. None of them involve hiring underqualified people, as Trump has insinuated.

“That’s a total misunderstanding of what DEI policies are about,” she says. “DEI policies don’t compromise on safety or performance standards. They focus on removing barriers and creating a work environment where everyone can contribute their best. This might mean running training programmes to raise awareness about unconscious bias, forming employee resource groups to support underrepresented groups, or taking steps to make recruitment and promotion policies fairer and more inclusive.”

One criticism of DEI initiatives is that they contradict the meritocratic system, which rewards the best-qualified, most talented, and hardest-working employees. According to Murphy, this is not the case.

“Well-designed DEI policies support fairness and decency in how people are treated in the workplace and this applies to everyone,” she says.

For a DEI policy to succeed, Murphy believes this message needs to be clearly spelt out to everyone in the workplace. “The media may currently be full of stories about organisations dropping their DEI approaches, but the DEI backlash has always existed. People have this perception that DEI delivers nothing for them. The solution to this is for companies to demonstrate that everyone benefits from these policies, if not now, then at a point in the future when their circumstances may be different.”

Facts and figures

Far from holding people back or negatively impacting organisations, DEI is good for business. A 2019 McKinsey report analysed data from more than 1,000 companies across 15 countries and found that gender, ethnic, and cultural diversity was strongly linked to financial performance. Gender-diverse organisations outperformed their peers by 15%, and ethnically diverse organisations outperformed their peers by 35%.

A 2023 survey by the recruitment company Monsters showed that DEI initiatives can help recruit talent, particularly younger talent. Some 83% of Gen Z respondents said that a company’s commitment to DEI was significant when choosing an employer.

A 2015 US study examined data from 4,597 health sector employees and concluded that diversity practices were associated with increased employee engagement. Other studies have linked DEI with enhanced productivity, innovation, and creativity, reduced turnover, and less conflict in the workplace.

“There’s no research whatsoever to suggest that an organisation should drop its DEI policies,” says McCarthy. “Research the world over shows that DEI is good for people and good for business.”

Rush points out that companies that decide to discontinue anti-discrimination or anti-harassment training could be exposing themselves to potential problems.

“They are opening themselves up to legal risk. This is because it’s a defence to a discrimination claim in the Workplace Relations Commission if an employer can demonstrate that they took all reasonably practicable steps to prevent discrimination or harassment. Providing regular training on equality policies is one of those practicable steps.”

Hidden impact of DEI

Lucy Michael supports organisations that want to provide such training. She is a former academic who spent 16 years researching how people behave and how organisations work.

“There’s so much data out there to show the positive impact these policies have on everything from attracting talent, employee engagement and employee turnover to how your organisation is viewed in terms of its values,” she says.

Michael wonders if the reason many companies quickly abandoned their DEI policies was because these benefits had never been explained to them.

“DEI policies can feel quite soft sometimes as if they’re nice to have but not really necessary,” she says. “But they offer a significant return on investment, and I’d urge anyone working in DEI to identify this return on investment for their senior leaders. Unless you are clear on what you are achieving by implementing these programmes, senior leaders could find an excuse to cut them.”

Much of her consultancy work involves helping companies to do just that: “I work with companies to identify the impact their DEI initiatives are having and show them how to measure that impact. I also help them identify areas where they could go better. Basically, my aim is to support them in ensuring that their organisation is made up of people with diverse talents who are supported in working together to the best of their ability and are properly recognised and rewarded for doing so.

“Employees and the organisations they work for can thrive when these conditions are in place. It’s a win-win situation, no matter what the anti-women, anti-disabled people, anti-migrant, and anti-ethnic-minority brigade want us to think.”